The device, as I understand it, is basically an advanced computer processor that runs a Virtual or Artificial Intelligence algorithm. It's necessary because it allows the robot equipped with it to learn and adapt to changing situations, which is necessary in the fluid realm of combat, where it's more important to predict where your enemy is, rather than react to your enemy. The Zoe program was uploaded as a test, and also as the desperate act of a grieving father, but it appeared that the program became corrupted, and so Daniel believed the program was completely lost. He was unaware that the Zoe program still lurked in the background, and it wasn't until after the prototype demonstration that that program came back to the forefront for whatever reason.